¶ … finance and financial entrepreneurship. The basis of the article is on a discussion that was held on this subject among four leading lights of financial entrepreneurship in the United States - Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. These people are famous in their own right and have had a sizeable role in financial entrepreneurship in the U.S. over the last 20 years. We have first discussed their achievements to get a clear idea about their personal achievements. This would certainly give a clear idea of what is possible in the U.S. today. They are of course interesting characters and one has to remember that the ideal entrepreneur of the 21st century cannot be thought of as an updated version of Henry Ford. After the discussion of the people, the meeting and the discussions held there are summarized. Based on the total information collected, we have come to the defense of the Thesis Statement. Thesis Statement

Financial Innovation is again poised to take off causing disbelief among the skeptics, who do not think anything new is likely to succeed in the present economic environment. A new group of innovators is coming up but their origin is unknown.

Introduction

It was felt that innovation was gradually slowing down. Four of the biggest innovators in the U.S. recently met at the Milken Institute Annual Conference in Los Angeles where the Wharton schools was a participant. The same question was asked to four titans from that period. The panel on financial innovation included Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. It was moderated by Glenn Yago, director of capital studies at the Milken Institute, a West Coast business and public-policy research institute. According to them, Miller gave a correct picture about the period mentioned, but the situation is changing now. Now let us look first at the people who gave this opinion.

Michael Milken

Michael Milken is often referred to as the junk bond king. He first opened up the bond market for the risky companies to the capital market and those companies were not even looked at by the investment banks. He earned enormous amounts of money - in 1987, it is said he earned $550 millions. Two years later he was caught and spent 22 months in jail. Milken was junk bond king at Drexel Burnham Lambert and his partner was Gary Winnick. They changed corporate takeovers and financing by the use of high-yield junk bonds. At the height of his success in the 1980s, Milken's personal wealth was legendary. As per the government, Drexel paid Milken $296 million in 1986 and $550 million in 1987. In 1989 a federal grand jury indicted Milken for violations of federal securities and racketeering laws. He pled guilty to securities fraud and related charges in 1990, but the government dropped the more serious charges of insider trading and racketeering. Milken was fined and sentenced to prison for ten years at first, but in 1991 his sentence was reduced to two years plus three years probation. After he was convicted he had become one of the most hated men in the U.S. After his release, Milken has worked on his public image with the alacrity that he had earlier used so successfully in the financial sector. (www.radford.net/news)

The Secret World of Mike Milken:

In December 1986, U.S. Attorney Rudolph Giuliani made an extraordinary deal, probably unprecedented in American justice. I suppose the name sounds familiar. The deal was with Ivan Boesky, the Wall Street arbitrageur, who had admitted using stolen information to make over a $100 million. In return, he was allowed to plead guilty to only a single count of securities violations, and permitted to keep secret his foreign bank and brokerage accounts, even if they had been enriched by his criminal activity. Also, the accounts in his wife and children's name were not touched....

Attorneys in both Washington DC and Los Angeles. What Boesky offered to give in return for this was information about the secret dealings of Michael Robert Milken. After his statements, Milken was convicted. His punishments we know about. The question remains, does this speak very highly about Milken.
One of the things that Milken seems very interested now is redwoods, or is it? Remember he was always a secretive man and he may not have told everything to Boesky. The fate of the largest unprotected redwood forest in the world may now rest in the hands of a surprising savior, the Federal Deposit Insurance Corporation. Since the 1985 MAXXAM took over Pacific Lumber, the redwood ecosystem known as the Headwaters Forest, located in Humboldt County on California's North Coast are under attack. All attempts at protecting them have failed - lawsuits, direct action, legislative efforts. MAXXAM seems to have a ravenous appetite for redwood lumber. Now many environmentalists and community activists are laying store by the FDIC. The federal agency may be able to acquire the redwood forest as partial or full payment for the $548 million outstanding claim against the United Financial Group (UFG), a holding company for United Savings Association of Texas (USAT), a failed savings and loan controlled by MAXXAM and its chief executive officer, Charles Hurwitz. Hurwitz has agreed to transfer part of the Headwaters Forest to federal government control, but he is insisting on a much higher payment than environmentalists are proposing. A company he controls UFG owes $548 million to the government but he has asked the government to pay him $600 million cash for a small grove of redwoods. If the offer is refused, he has threatened to destroy the forest. "If the federal government does not purchase the Headwaters Forest, Pacific Lumber will go ahead with its timber operations," says the MAXXAM Director of Public Relations Scott Lamb. (www.radford.net/news)

Hurwitz had paid approximately $900 million for 196,000 acres owned by Pacific Lumber. If his proposal to sell 4,500 acres for $600 million is accepted by the government, Hurwitz would get a profit of more than 2,800%. His threat would be taken seriously by people who know him. The company has already cut hundreds of trees in the old-growth grove of Owl Creek on holidays and weekends when state regulators were not working, in violation of the California Board of Forestry cutting regulations twice in 1992. Both times the cutting had to be stopped through court injunction. Under their current plans, MAXXAM will harvest all the remaining old-growth redwoods it owns within the next 14 years. Many of the trees in the Headwaters Forest are as old as 2000 years. The cornerstones of this unique ecosystem depend on species diversity and a continual recycling process interlocking life with death. When a 300-foot redwood falls, it becomes a nurse log for the new seedlings to grow. The seedlings grow right out of the nurse log, which provides nutrients to the new trees as it decays. As the older tree falls, it also creates a canopy break in an otherwise shady forest. The nurse log also provides the essential sunlight.

When forests are cut for the logs, this ecological recycling process does not happen and thus seriously threatens the forest's ability to regenerate. When loggers remove cut trees, the nutrients that the trees would have returned to the soil are removed at the same time. The soil itself will also be lost when it rains because it no longer has trees holding the soil in place. As topsoil is depleted, desertification begins. The redwood forests even today support a diverse array of animals including California black bear, mountain lion, Pacific fisher and steelhead trout. But, logging is taking a severe toll on the forest wildlife. Many rare and endangered species also live among the redwoods of Humboldt County. They are the northern spotted owl, marbled murrelet, pacific giant salamander, tailed frog and coho salmon. Their survival also depends on a diverse and healthy old-growth forest. Carl Ross, co-director of Save Americas Forests, the nation's largest grassroots forest protection organization, says, "If we fail to protect these last stands of redwoods, we will lose one of the greatest wonders of the living world for all time. Less than 4% of native redwoods are still standing, and that tiny percentage is being hacked and cut for the last shred of money that can be sawed from their red roots. If we allow the extinction of these largest of all living things, we will be condemned as a society that knew the price of everything and the value of nothing." (www.radford.net/news)

The redwoods of Humboldt County are a long way from Houston, and United Savings Association of Texas situated at Houston. If the FDIC decides to pursue the connection, then only the Headwaters Forest may survive. There was no need for worry about the Headwaters Forest before Hurwitz took over the Pacific Lumber Company. This family-run business maintained one of the most economically and environmentally sound timber companies in the United States. Pacific Lumber did not clear cut. It…